CBAM and Carbon Footprint Management: The Relationship Between Carbon Footprint and CBAM
- Sezer Kari
- Oct 20
- 26 min read
General
Please note that this FAQ document focuses on the transition period of the Border Carbon Adjustment Mechanism (BCAM / SKDM), which came into effect on 1 October 2023. Some questions also address the definitive period starting in January 2026.
Why is the European Union (EU) establishing a Border Carbon Adjustment Mechanism (BCAM)?
The EU is a global leader in international efforts to combat climate change. The European Green Deal sets out clear targets of a 55% net reduction in greenhouse gas emissions by 2030 (compared to 1990 levels) and achieving climate neutrality by 2050.
In July 2021, the European Commission presented the Fit for 55 policy proposals to turn these targets into reality, further strengthening the EU's role as a global climate leader. Since then, these policies have been shaped through negotiations with the co-legislators—the European Parliament and the Council—and many have been incorporated into EU law. This ensures that climate action, including BCAM, is not undermined.
Current Stage of BCAM Implementation
The European Parliament and the Council of the European Union, as co-legislators, signed the BCAM Regulation (EU) 2023/956 on 10 May 2023.
Transition period: BCAM started on 1 October 2023, and the first quarterly reports are due by 31 January 2024.
The rules and requirements for emissions reporting under BCAM are detailed in the Implementing Regulation (EU) 2023/1773, which governs reporting during the transition period.
The Commission has established the BCAM registry for the transition period, is preparing additional secondary legislation, and is conducting planned analyses.
The definitive period will start in January 2026.
The European Commission has also provided detailed guidance for the transition period, including manuals, webinars, e-learning materials, and other resources. All information supporting implementation is available on the Commission’s BCAM webpage.
How Does BCAM Work?
BCAM is designed to comply with the EU’s international obligations, including WTO rules. The system mirrors the EU Emissions Trading System (ETS) as follows:
BCAM applies to the embedded emissions of products imported into the EU, calculated using a method consistent with ETS reporting for similar products produced in the EU.
From 2026, importers will purchase BCAM certificates corresponding to the carbon price that would have been paid if the products were produced under EU carbon pricing rules.
Conversely, if a non-EU producer has already paid a carbon price in a third country for the embedded emissions of imported products, this cost can be fully deducted from the BCAM liability.
BCAM thus helps reduce carbon leakage, incentivizes greener production outside the EU, and encourages countries to implement their own carbon pricing measures.
BCAM is being implemented gradually, initially covering products from sectors with a high risk of carbon leakage:
Iron & steel
Cement
Fertilizers
Aluminum
Hydrogen
Electricity production
During the transition period starting 1 October 2023, a reporting system applies to these products to ensure a smooth transition and facilitate dialogue with third countries. Importers will begin paying BCAM financial adjustments in 2026.
Interaction Between BCAM and the EU ETS
The EU ETS is the world’s first international emissions trading system and a cornerstone of the EU’s climate policy. It sets a cap on greenhouse gas emissions from energy production and large industrial installations.
Emission allowances must be purchased, but to prevent carbon leakage, some free allowances are granted.
BCAM will be applied gradually as free allowances are reduced, ensuring that sectors under BCAM are aligned with the EU ETS’s carbon pricing and reduction incentives.
BCAM certificates’ prices will reflect the ETS allowance price, and the system will be fully aligned with revised ETS rules in 2026.
In simple terms: BCAM will only apply to emissions not covered by free allowances under the ETS, ensuring fair treatment for importers compared to EU producers.
Compatibility With Non-EU ETS Systems
BCAM ensures that imported products are not given preferential treatment compared to EU products, thanks to three key design features:
BCAM considers the actual value of embedded emissions, so companies exporting to the EU that have decarbonized production pay less.
The price of BCAM certificates for imports mirrors the EU ETS price applicable to EU producers.
Effective carbon prices already paid in third countries are deducted to avoid double pricing.
Secondary legislation will define rules for considering carbon prices paid abroad before the end of the transition period. During the transition, reports must include embedded emissions and any carbon prices paid in the source country for informational purposes.
Sectors Covered and Why
Initially, BCAM applies to imports of:
Cement
Iron & steel
Aluminum
Fertilizers
Hydrogen
Electricity
These sectors were selected based on high carbon leakage risk and high emission intensity, representing over 50% of emissions from ETS-covered industry sectors once fully implemented. BCAM may be expanded to other ETS sectors in the future.
Products Covered by BCAM
BCAM applies to CN codes (Combined Nomenclature) with an additional two-digit HS code, used for products exported outside the EU.
All products requiring embedded emissions reporting are listed in Annex I of the BCAM Regulation and are called “BCAM products.”
For example, ammonia (fertilizer sector, CN code 2814) falls under BCAM even if not used for fertilizer production.
Application to Second-Hand or Returned Products
Second-hand products: BCAM applies to all imported products entering the EU single market.
Returned products: Products of EU origin returned under certain conditions are exempt. BCAM only applies to products from third countries.
Application to EU Outer Regions
BCAM applies only to products from third countries imported into the EU customs territory. Regions like La Réunion and Mayotte are part of the EU customs territory, so BCAM does not apply to products produced there.
Third Countries Covered
BCAM covers products from all non-EU countries.
Some countries participating in the EU ETS or a linked ETS may be exempted to avoid double carbon pricing (e.g., EEA members, Switzerland).
BCAM applies to imported electricity from third countries unless fully integrated with the EU market, in which case exemptions may apply and will be reviewed in 2030.
Reporting for UK-Origin Products
Embedded emissions of products originating from the UK must be reported during the transition period.
Transition Period
Start: 1 October 2023
End: 31 December 2025
During this period, importers or indirect customs representatives must report embedded emissions for imported BCAM products quarterly, without making adjustment payments, to allow time for the final system.
The first quarterly report is due by 31 January 2024, covering 1 October – 31 December 2023.
Reporters should contact their national competent authority to access the BCAM Transition Guidance.
The English translation is as follows:
Are there penalties for non-compliance with the CBAM Regulation?
Yes. The embedded emissions of CBAM goods must be reported as of October 1, 2023. Declarants who fail to report may be subject to penalties ranging from EUR 10 to EUR 50 per undeclared emission. Penalties are applied in cases where a) the declarant has not taken the necessary steps to comply with their obligation to submit a CBAM report, or b) the CBAM report is incorrect or incomplete and the declarant has not taken the necessary steps to correct the CBAM report after the competent authority has initiated a correction procedure.
Where can I find detailed information on how to report embedded emissions?
All the information required to make the declaration is specified in the Implementing Regulation (EU) 2023/1773, which sets out the reporting rules for the transitional period. Commission services have published (and will periodically update) a guidance document for importers and one for third country producers (one for importers of CBAM goods, the other for producers in third countries), as well as an optional communication template to facilitate the exchange of information between producers and importers. You can find these documents on the CBAM website: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en. The guidance document for EU importers will be available in the 24 official EU languages. The guidance document for third country producers will be available in English, French, German, Polish, Spanish, Italian, Arabic, Korean, Mandarin, Hindi, and Turkish.
Is it mandatory to use the communication template Excel file?
No, the communication template is not mandatory, but it is recommended. The communication template allows businesses to determine the embedded emissions in CBAM goods according to the method specified in Implementing Regulation (EU) 2023/1773. The template takes into account all relevant flow of resources and emission sources, electricity consumption and relevant precursors for the calculation. The template includes a worksheet named 'Summary_Communication', which contains all the information needed by the declarant. This worksheet thus facilitates communication between third-country producers and importers (or their representatives).
Who is responsible in cases where incorrect or insufficient information is submitted?
The responsibility lies with the declarant. This may be the importer or the indirect customs representative. The national competent authority is responsible for engaging in appropriate dialogue with the declarant and applying penalties.
If I have further, more specific questions, whom can I contact?
The relevant national competent authorities and, ultimately, the Commission are at your disposal to clarify any doubts regarding the application of the CBAM. The list of national competent authorities is published and continuously updated on the Commission's dedicated CBAM website: Carbon Border Adjustment Mechanism (europa.eu).
Reporting: General Issues
Who is responsible for reporting?
Customs authorities will notify the persons making the customs declaration of the obligation to report information during the transitional period. The declarant will be the importer or the indirect customs representative, depending on who makes the customs declaration. Customs authorities are free to choose the way to notify the reporting obligations.
The person responsible for the reporting obligation may be one of the following:
The importer, if (i) the importer makes the customs declaration for release for free circulation of the goods in their own name and on their own behalf; and (ii) the importer is also the person authorized to make the customs declaration and declares the import of the goods;
The indirect customs representative, if the customs declaration is made by the indirect customs representative appointed in accordance with Article 18 of Regulation 952/2013: if the importer is established outside the European Union; or if the indirect customs representative has accepted the reporting obligations in accordance with Article 32 of Regulation 2023/956 and the importer is established inside the European Union. The appointed indirect customs representative must be established within the European Union and must meet the conditions for customs representatives set by the respective Member State (see Article 18 of Regulation 952/2013).
Is it possible for an importer to have more than one indirect customs representative?
The importer is free to use different indirect customs representatives, each of whom is responsible for the specific CBAM goods included in the customs declaration they make. Each representative will indicate their own EORI number at customs, which is the proof of who is responsible for the embedded emissions. Therefore, double counting of embedded emissions is not possible.
Will companies be allowed to report at a centralized level when their subsidiaries in different Member States have different Economic Operators Registration and Identification (EORI) numbers?
In principle, CBAM goods are attributed to a CBAM declarant making the CBAM declaration via the EORI number presented to the customs authorities. This means that, by default, CBAM reports for different subsidiaries (with different EORI numbers) will be made separately. However, as importers are allowed to appoint an indirect customs representative to undertake their CBAM obligations, a single indirect customs representative may be appointed and report centrally by representing all subsidiaries.
Reporting Obligations: What Are They and When Should I Submit the Report?
During the CBAM (SKDM) transition period, from 1 October 2023 to 31 December 2025, importers must submit a CBAM report every quarter. This report should contain information regarding products imported in the previous quarter and must be submitted no later than one month after the end of the respective quarter. The reporting schedule for the transition period is outlined below:
Reporting Period | Submission Deadline |
2023: October–December | 31 January 2024 |
2024: January–March | 30 April 2024 |
2024: April–June | 31 July 2024 |
2024: July–September | 31 October 2024 |
2024: October–December | 31 January 2025 |
2025: January–March | 30 April 2025 |
2025: April–June | 31 July 2025 |
2025: July–September | 31 October 2025 |
2025: October–December | 31 January 2026 |
The report must include the information specified in Article 35 of the Regulation:
Total quantity of each type of CBAM (SKDM) product
Total direct embedded emissions
Total indirect emissions
Carbon price paid in the country of origin for the embedded emissions of the imported product (including relevant precursors, if applicable), taking into account any current discounts or other forms of compensation
Do small quantities of CBAM products fall under the Regulation?
Small quantities of imported CBAM products may automatically be exempt under the de minimis exemption. This exemption applies if the total intrinsic value of the CBAM products does not exceed EUR 150 per shipment. If the total value of all CBAM products in a shipment exceeds EUR 150, the exemption does not apply.
Illustrative examples:
Case 1: Shipment contains X non-CBAM products, each valued at Y EUR. These are irrelevant for the de minimis exemption. One package of Portland cement (CN code 2523 21 00) valued under EUR 150 → de minimis exemption applies.
Case 2: Shipment contains X non-CBAM products, each valued at Y EUR. These are irrelevant. One ton of Portland cement (CN code 2523 21 00) and one ton of other Portland cement (CN code 2523 29 00), each valued at 120 EUR → total value exceeds 150 EUR → de minimis exemption does not apply.
I did not import CBAM goods in a given reporting quarter. Do I still need to submit a CBAM report?
If no CBAM goods were imported in a specific quarter (i.e., not released for free circulation), you do not need to submit a CBAM report for that quarter.
Reporting: Responsibilities and Procedures
Role of the European Commission during the transition period:
During the transition period, the Commission will:
Manage the CBAM Transition Period Registry
Provide the list of non-submitted reports to National Competent Authorities (NCAs)
Monitor the implementation, progress, and risks of CBAM, including its impact on exports, downstream products, trade flows, and least developed countries (LDCs)
Prepare secondary legislation in the form of implementing acts, including:
Mid-2023: transition period (Article 35), reporting obligations, and reporting infrastructure
Mid-2024: declarant authorization (Articles 5 and 17) and CBAM registry (Article 14)
Mid-2025: indirect emissions (Annex 4), verification (Article 8), supervisory accreditation (Article 18), carbon price paid (Article 9), customs information (Article 25), continental crust (Article 2), average ETS price (Article 21), CBAM declaration (Article 6), methodology (Article 7), and free allowances (Article 31)
Mid-2025: accreditation (Article 18) and certificate sale and resale (Article 20) in delegated acts. If necessary, delegated acts may also cover exempt countries, electricity rules, and circulation prevention rules
Set up the Central Platform for certificate sales and repurchases in the definitive period
What is a National Competent Authority (NCA)?
Each EU Member State has designated an NCA responsible for tasks defined in Regulation 2023/956, including:
Checking the quality of CBAM quarterly reports (with Commission support)
Communicating with declarants who fail to submit reports
Ensuring compliance with CBAM rules and imposing penalties if necessary
From 2025, granting “authorized CBAM declarant” status for the definitive period
National Competent Authorities’ list is published and updated on the EU’s CBAM website: Carbon Border Adjustment Mechanism (europa.eu)
Do importers need to be “authorized” to import CBAM products during the transition period?
No, importers do not need to be authorized during the transition period. Customs will inform importers of the reporting obligations when releasing CBAM products for free circulation.
Verification obligations during the transition period
No independent verification by an external entity is required during the transition period
Verification becomes mandatory from 2026 onwards
Secondary legislation for the definitive period will define verification rules based on data collected from importers during the transition period
Primary documents for the quarterly CBAM report
No primary documents need to be submitted
Information should be submitted via the CBAM Transition Period Registry
According to Implementing Regulation Annex III, Section A.2:
Complete and transparent records for calculating embedded emissions must be kept at the premises of the reporting entity for at least 4 years
Records should include all supporting documentation and must be made available upon request by EU Member States during inspections
I am both an importer and an indirect customs representative submitting CBAM reports on behalf of another importer. Should I submit a single CBAM report or two separate reports?
If the reporting declarant acts both as an importer (e.g., Company A importing steel) and as an indirect customs representative (e.g., importing aluminum for Company B), the declarant must still submit a single quarterly CBAM report that includes all CBAM products for which they are responsible in the customs declaration.
What is the effective “carbon price” I should report?
As defined in the CBAM Regulation, the carbon price refers to the monetary amount paid in a third country under a carbon emission reduction scheme for greenhouse gases released during production. This can take the form of taxes, levies, fees, or emission allowances under an emissions trading system.
During the transition period, reporting declarants must report the effective carbon price paid in the jurisdiction where the CBAM product was produced. In the definitive period, disclosing this information provides importers a discount to prevent double pricing of embedded emissions.
Who will verify the accuracy of the submitted data and reports?
During the transition period, under Article 11 of the Implementing Regulation:
The Commission will perform an initial screening of CBAM reports
A list of incomplete or suspicious reports (i.e., reports that the Commission considers non-compliant) will be sent to the National Competent Authority (NCA)
The NCA may then initiate a review and potential correction procedure, which could eventually lead to penalties
Is it possible to correct a previously submitted CBAM report?
Yes. Under Article 9 of the Implementing Regulation:
A CBAM report can be corrected for up to two months after the end of the reporting period
For the first two monthly reports, a longer correction period applies (e.g., reports due by 31 January and 30 April 2024 can be corrected until 31 July 2024)
Should the report be in English, or can it be submitted in other languages?
Reports can be submitted in all 24 official EU languages.
Reporting: CBAM Transition Period Registry
What is the CBAM Transition Period Registry?
To ensure effective implementation of reporting obligations, the Commission developed an electronic database for the transition period.
The CBAM Transition Period Registry is a standardized and secure electronic system for reporting, ensuring data access, processing, and confidentiality
It serves as the basis for the CBAM Registry under Article 14 of Regulation 2023/956
Importers can access it here: CBAM Transition Period Registry
Purpose of the CBAM Transition Period Registry
The Registry facilitates communication between the Commission, competent authorities, customs authorities, and reporting declarants.
It is used for data collection and analysis, not for enforcement purposes
Is it the same as the EU Customs Trader Portal (EUCTP)?
No. The Registry operates independently from the EUCTP, although existing importers may use their current accounts if allowed by their Member State. Some Member States require separate access for the CBAM module.
Are the data shared in the Registry confidential?
Yes. According to Article 14 of the CBAM Regulation:
All information in the Registry is confidential, except for business names, addresses, contact details, and the location of installations in third countries
Article 13 of the Regulation and Article 15 of the Implementing Regulation impose professional secrecy obligations on NCAs regarding received information
Optional Excel templates allow operators to decide whether to share sensitive information. The Commission will continue to refine rules for reporting and disclosure in the definitive period.
How can a declarant register and access the Registry?
Economic operators wishing to become reporting declarants must apply to their Member State NCA
The NCA verifies legitimacy and grants access to the Registry
Access may involve a new CBAM account or existing customs credentials depending on the Member State
Production Registry (live data): https://SKDM.ec.europa.eu/declarantConformance Registry (test environment): https://conformance.SKDM.ec.europa.eu/declarant
Who can register a company as a CBAM declarant?
Any natural person authorized to represent a company can apply to the NCA to gain access. The NCA validates the request and grants access. The account holder is responsible for confidentiality and managing additional employee accounts.
Can companies not directly subject to CBAM access the Registry?
No. Access is restricted to reporting declarants, NCAs, customs authorities, and the Commission.
How should data be entered in the Registry?
Quarterly reports are entered per importer, per CN code, per installation
Two options:
Manual entry in the Registry interface
XML upload: An XML file creates a draft quarterly report which can then be submitted via the interface
A supporting XLS file for preparing the XML will be published by the Commission
Mandatory fields are marked with a (*) and must be completed to submit the report
Guidance for using the Registry and XSD files is in the Registry User Guide for Declarants. Draft reports can be saved even if not all mandatory fields are completed, but submission requires all mandatory fields.
Methodology for calculating embedded emissions in CBAM products during the transition period
Default reporting period: calendar year
Other periods covering at least 3 months may be justified
Previous year data can be used if current year data is unavailable (e.g., for Q1 reports)
Simple vs. complex products
Simple products: produced from input materials considered to have zero embedded emissions under CBAM reporting methodology; emissions are only from production
Complex products: must include embedded emissions of relevant precursors used in production; e.g., clinker as a precursor in Portland cement
What are direct and indirect emissions?
Direct emissions cover emissions occurring during the production of CBAM products, including emissions from heating and cooling, regardless of where the heating or cooling is produced.
Indirect emissions cover emissions from the electricity consumed during the production of CBAM products.
When determining embedded emissions for CBAM products, the embedded direct and indirect emissions of relevant precursors must also be considered.
During the transition period, importers must report both direct and indirect emissions for all CBAM products.
From 1 January 2026, in the definitive period:
CBAM scope for iron/steel, aluminium, and hydrogen will be limited to direct emissions only.
Importers of cement and fertilizers must report both direct and indirect emissions.
What is the “bubble approach” and how does it work?
If an installation produces a complex product and also produces its precursor solely for that complex product, a single combined production process system boundary can be defined within the installation.(See guidance documents for detailed explanations.)
Should AB-produced precursors be considered when a CBAM product is imported?
Yes. Relevant precursors produced in the EU must be included when determining embedded emissions.
If a precursor originates from EU production, any carbon price already paid in the EU may also be reflected in the CBAM report.(More info: Carbon Trading Guidance, Section 6.10 for non-EU installations.)
Does the European Commission formally verify the equivalence of alternative methods?
The transition period is a learning period for all stakeholders, including the Commission and NCAs.
If alternative methods do not meet the standards in Article 4(2) of the Implementing Regulation, the method may be rejected, especially after 31 July 2024.
NCAs may contact the reporting declarant to obtain more accurate data.
How are indirect emissions in CBAM product production determined?
Indirect emissions are calculated by multiplying the electricity consumed by a relevant emission factor, which may represent:
The electricity grid (default factor)
A real emission factor (if a technical link or purchase agreement exists between the electricity producer and the CBAM-producing installation)
Which emission factors should be used for electricity?
Default factors for the transition period are based on IEA 5-year averages and provided per country in the CBAM Transition Period Registry.
Alternative factors may be used if they are public and represent the actual electricity used.
Can market-based certificates (Guarantees of Origin, RECs, etc.) justify using real emission factors?
No. During the transition period:
Default factors provided by the Commission are the standard
Real factors may only be used if a direct technical connection or electricity purchase agreement exists
Market-based certificates cannot be used to justify real emission factors
(More info: Implementing Regulation Annex III, D.2; Guidance for non-EU installations, Section 6.7.3.2.)
Should emissions from on-site transport be included?
Emissions from fixed transport systems (conveyors, pipes, etc.) are included
Emissions from mobile machinery (trucks, forklifts, etc.) are excluded
These rules are aligned with the EU ETS
Can Carbon Capture & Utilization/Storage (CCU/CCS) be used to offset emissions?
Yes, provided certain conditions are met:
Captured CO₂ is permanently chemically bound in a product
Or captured CO₂ is stored in a long-term geological storage(More info: Implementing Regulation Annex III, B.8.2; Guidance, Section 6.5.6.2)
What if my supplier does not provide the required information before the reporting deadline?
Good cooperation between third-country producers and declarants is essential
The reporting declarant is responsible for the completeness and accuracy of the CBAM report and may be subject to penalties
During part of the transition period (until mid-2024), declarants may use default values provided by the Commission for missing data
When can default values be used?
For the first three reporting periods, default values can be used without quantity limits
Afterwards (1 July 2024 – 31 Dec 2025), estimated/default values are limited:
For complex products, up to 20% of total embedded emissions may be estimated using defaults
By the end of 2025, the Commission will evaluate default values based on collected data
During the transition, default values are general per CN code; in the definitive period, they may be country- or region-specific
How are default values determined and published?
The EU Joint Research Centre (JRC) published estimates on 29 September 2023 for emission intensities of products from four energy-intensive sectors (iron/steel, fertilizers, aluminium, cement) in major trade partners
These estimates include CO₂, N₂O (for some fertilizers), and PFCs (for aluminium products)
They inform the default values for the transition period, which were published by the end of 2023
How long can EU importers use alternative monitoring and reporting methods?
Until 31 December 2024, declarants may use methods providing similar coverage and accuracy, such as:
(a) Carbon pricing schemes
(b) Mandatory emission monitoring schemes
(c) In-plant emission monitoring schemes
Until 31 July 2024, alternative reference methods may be used for products with incomplete data
These alternative methods will be evaluated for the definitive CBAM reporting methodology
How are emissions from biomass use accounted for?
CBAM follows EU ETS rules:
Biomass used as a process input (e.g., reducing agent in a blast furnace) is not counted (“zero rating”)
Biomass used as fuel for energy purposes counts, unless it meets EU sustainability criteria under the Renewable Energy Directive 2018/2001
Applicability depends on the type of biomass; further guidance is in Annex D of the non-EU guidance document
How should decimals and rounding be handled in calculations?
All significant figures should be retained throughout the calculation, consistent with measurement uncertainty
How should decimals and rounding be handled in calculations?
All “significant” figures (consistent with measurement uncertainty) should be retained throughout the calculation.
Should gross weight or net weight be used for imported CBAM goods?
CBAM goods are measured by net weight upon import into the Union customs territory. Therefore, net weight must also be used when calculating embedded emissions of CBAM goods.
How should stock items without emission data be treated?
Embedded emissions of such stock items may be estimated using default values published by the European Commission until 31 July 2024.
After this date, actual data must be reported.
For old spare parts or stock items, missing data can be substituted with data for similar or identical products after 31 July 2024.
How should emissions be allocated if a facility is used by multiple production processes simultaneously?
All inputs, outputs, and related emissions at a facility must be attributed to a production process unless linked to non-CBAM products.
Emissions from a facility must be fully accounted for by CBAM and, if relevant, other non-CBAM production processes.
For multiple relevant processes sharing equipment or emission sources, emissions should be allocated proportionally.
Example: If treated water is produced and 60% is used for a CBAM product, 60% of related direct and indirect emissions should be allocated to the CBAM product.
Should non-saleable quality products be included in activity levels?
If non-saleable products can be sold and the production process falls under CBAM product categories (as listed in Implementing Regulation (EU) 2023/1773), they must be included in activity levels.
Cement
Is cement considered a complex CBAM product?
Yes. Cement is a complex product because clinker, its precursor, is itself a CBAM product.
Fertilizers
Are exothermic chemical reactions in fertilizer production counted as direct emissions?
Yes. If the reaction produces CO₂ via oxidation of organic chemicals and CO₂ is released, it counts as direct emissions.
Emissions from converting natural gas to hydrogen are also considered direct emissions.
Can CO₂ bound in urea be considered negative emissions?
No. CO₂ bound in urea is not counted as negative emissions under EU ETS.
Therefore, no reductions for CO₂ in urea apply under CBAM reporting.
This also means CO₂ transferred to urea production from ammonia production is counted under ammonia emissions.
Electricity as a CBAM product
Who is the declarant for imported electricity?
Generally, it is the person listed as the importer in the customs declaration.
Exception: If capacity allocation is explicitly made under Article 5(4) of the CBAM Regulation, the person allocated the capacity and nominated it for import is considered the CBAM declarant in that Member State.
Difference between electricity and CO₂ emission factors
Electricity emission factor: weighted average of all electricity generation sources (including nuclear and renewables) in a geographic area.
CO₂ emission factor: weighted average of electricity generation from fossil fuel sources only, usually higher than the electricity emission factor.
During the transition period:
Use CO₂ emission factors for electricity to determine specific direct embedded emissions
Use electricity emission factors for other CBAM products to determine specific indirect emissions
Which CO₂ emission factors should be used?
Default values are calculated for each third country or group of countries based on best available data.
Transition period defaults are based on IEA 5-year averages and provided by the Commission.
If no default exists, the EU CO₂ emission factor should be used.
Declarants may adjust the CO₂ factor if they provide sufficient evidence from official, public data.
Requirements for reporting actual embedded emissions (“conditionality”)
Real emissions data can be used if the following conditions are met:
The electricity is covered by a power purchase agreement between the declarant and a third-country electricity producer.
The producer is directly connected to the EU transmission system, and no physical congestion occurs at export.
Fossil-based CO₂ emissions do not exceed 550 g CO₂/kWh at the facility.
Allocated electricity corresponds exactly to capacity assigned by all responsible transmission operators in the origin country, covering at least one hour.
Are transit countries considered for electricity under CBAM?
No. The relevant third country is the country of production, and transit countries are not included.
System boundaries for electricity
Only direct CO₂ emissions during electricity production are included.
Upstream emissions (e.g., wind turbine manufacturing or installation) are excluded.
Hydrogen
Connection to RED II (EU 2018/2001) for hydrogen as a CBAM product
If hydrogen is certified as RFNBO under Delegated Regulation (EU) 2023/1184, a zero emission factor for electricity can be applied.
If not certified, indirect emissions must be calculated according to Annex III.
Iron and Steel
Are auxiliary processes like lime kilns or coke ovens included in embedded emission calculations?
System boundaries for each product category are in Annex III of Implementing Regulation (EU) 2023/1773.
Lime kilns and coke ovens are excluded, as their outputs are not CBAM products.
Auxiliary processes like treated water or compressed air are included.
Are iron ore pellets within CBAM scope?
Yes. CN code 2601 12 00 (“agglomerated iron ores and concentrates excluding roasted iron pyrites”) is included.
They are considered precursors (e.g., for pig iron or DRI).
Aluminium/Steel
Should embedded emissions be determined separately for different alloy classes?
Embedded emissions are generally determined per combined product category, unless multiple production methods exist in the same plant.
Combined categories may include different CN codes.
During the transition period, emissions can be reported per combined category.
Companies may voluntarily determine more detailed embedded emissions for specific products or groups.
If you want, I can create a concise English CBAM reference table summarizing:
Direct vs. indirect emissions
Simple vs. complex products
Default and real values for electricity, cement, fertilizers, steel/aluminium
This would make it very easy to quickly check reporting rules. Do you want me to do that?
Customs
Can an importer use different customs representatives for the customs declaration and CBAM reporting?
Under the transitional period reporting requirements, the CBAM Regulation (Article 5) allows importers of CBAM goods to appoint direct or indirect customs representatives under Article 18 of the Union Customs Code (see also Regulation 952/2013):
Direct representation: If the importer is established in the EU, they remain subject to CBAM obligations, while the direct customs representative acts as the declarant for the customs declaration.
Indirect representation: If an EU-established importer appoints an indirect customs representative and the representative agrees, the reporting obligations apply to the indirect customs representative.
Non-EU importer: If the importer is not established in an EU Member State, the reporting obligations always fall on the indirect customs representative.
Thus, for an importer established in an EU Member State, it is possible to use different customs representatives for the customs declaration and CBAM reporting — e.g., the direct customs representative handles the customs declaration while an indirect representative is appointed to handle CBAM reporting. In such cases, the direct representative must indicate the indirect customs representative in the customs declaration. However, during the transitional period, it is not possible to have multiple indirect customs representatives for CBAM goods under the same customs declaration.
For a non-EU importer, the indirect customs representative is responsible for both the customs declaration and the CBAM declaration.
What happens if an indirect customs representative refuses to fulfil CBAM reporting obligations?
This is only possible if the importer is established in the EU. If the importer is not established in the EU, the indirect customs representative must fulfil CBAM reporting obligations.
According to Article 8.3 of the Implementing Regulation, if an indirect customs representative refuses to fulfil CBAM reporting obligations, they must inform the importer that they remain responsible for the reporting.
If the importer is not informed, the indirect customs representative remains responsible for reporting obligations.
Can a direct customs representative be a CBAM declarant for companies established in the EU?
EU importers can appoint direct or indirect customs representatives. However, CBAM reporting obligations (under the CBAM Regulation and Implementing Regulation) fall on the importer or the indirect representative, if the latter accepts the task (see Regulation (EU) 2023/956, Article 32, for the transitional period).
Even if the importer appoints a direct customs representative, the importer remains responsible for CBAM reporting obligations. In other words, the importer remains the declarant for CBAM purposes.
Nothing prevents importers from engaging service providers to assist in preparing and submitting CBAM reports, but the responsibility for compliance remains with the importer or, where applicable, the indirect representative.
Are customs representatives required to check whether their client is a registered CBAM declarant before submitting a customs declaration?
According to Article 15(2) of the Union Customs Code (UCC), the person submitting a customs declaration (importer or customs representative) is responsible for:
(a) the accuracy and completeness of the information in the declaration;
(b) the accuracy, authenticity, and validity of the supporting documents;
(c) compliance with all obligations related to the customs procedure, including the release of goods for free circulation or other authorized operations.
This also applies to providing any information in other forms submitted to customs authorities.
Based on this, it is advisable for a direct customs representative to verify whether the person submitting the declaration complies with CBAM requirements before submitting the declaration for CBAM goods.
My company is registered in an EU Member State but imports CBAM goods through multiple Member States. Should I consolidate these imports in a single quarterly report?
During the transitional period, the CBAM declarant is responsible for submitting quarterly CBAM reports covering all embedded emissions of imported CBAM goods. CBAM goods are attributed to a declarant via the EORI number submitted to customs authorities.
If there is only one company and one EORI number, the quarterly CBAM report should consolidate all CBAM goods imported by that company, even if the goods were imported through different Member States.
Importers can appoint a third-party customs representative, and if that representative agrees to fulfil the reporting obligations, they must submit the EORI number and fulfil CBAM obligations on behalf of the importer during importation.
Are goods in transit between EU countries subject to CBAM reporting?
No. Only goods released for free circulation in the EU are subject to CBAM. Goods merely in transit within the EU are not subject to CBAM.
Are CBAM obligations applied if goods enter free circulation in the EU through an inappropriate customs procedure and all duties have already been paid?
The release of goods for free circulation requires CBAM compliance. Verification of compliance must occur before release.
If the procedure is inappropriate, Article 198(1)(b) of the Union Customs Code applies, meaning customs authorities may take any necessary measures (including seizure, sale, or destruction) because CBAM requirements have not been fulfilled.
In this case, Article 198(2) UCC also applies, treating third-country goods subject to state abandonment, seizure, or confiscation as being under customs warehousing procedure.
Do I need to report CBAM goods under the inward processing regime?
CBAM applies only to goods released for free circulation in the EU. Therefore, goods placed under customs suspension for future export or processing do not incur CBAM obligations.
However, if CBAM goods under inward processing leave the regime to enter the EU market, CBAM obligations arise.
Also, in specific cases where goods under inward processing are released for free circulation as finished products (Article 6 of the Implementing Regulation), a CBAM report must include quantities and embedded emissions of goods under inward processing. These goods themselves may not be CBAM goods, so embedded emissions of the released final products are reported differently (Articles 6(a) and (b) do not apply).
Definitive Period
How will CBAM work in the definitive period?
CBAM will reflect ETS costs based on certificates purchased by importers. Prices are based on weekly average auction prices of EU ETS allowances and expressed in € per ton of CO₂ equivalent.
Importers must register individually or via a representative to participate in CBAM and purchase certificates. Certificates delivered by the CBAM declarant must correspond to the embedded emissions of the imported goods. Importers can also purchase certificates throughout the year.
Certificates are sold by each Member State to authorised CBAM declarants only. These certificates cover imports occurring in 2026 and must be delivered by 31 May 2027 via the CBAM registry. Reporting of embedded emissions will continue to be done online via the CBAM Registry.
Importer obligations in the definitive period
Only authorised CBAM declarants may import CBAM goods into the EU (CBAM Regulation Article 4).
Non-EU importer → indirect customs representative
EU importer → importer or agreed indirect representative
If a non-EU importer does not have an authorised CBAM declarant, CBAM goods cannot be imported into the EU.
If an EU importer is not an authorised CBAM declarant after 2026, customs authorities will prohibit importation (Article 25 CBAM Regulation).
CBAM reporting and Registry access
Reports are submitted via the CBAM Registry by authorised declarants.
The transitional period registry is replaced by the CBAM Registry in the definitive period.
Upon approval by the competent authority, the declarant is assigned a CBAM account number to access the registry.
Role of the European Commission
The Commission will continue to:
Manage the CBAM Registry
Review submitted reports
Communicate issues with national authorities
Monitor CBAM implementation and avoidance risks
Operate a central platform for selling CBAM certificates
Will CBAM scope expand?
After the transitional period (end of 2025), the Commission will review CBAM implementation and may propose expansion to additional products and sectors under carbon leakage risk. Expansion requires legislative approval from the European Parliament and Council.
Authorisation of CBAM declarants
The competent authority in the applicant’s Member State grants authorisation if the applicant:
Has no serious or repeated violations of customs, tax, market abuse rules, or CBAM Regulation
Demonstrates financial and operational capacity
Is established in the Member State of application
Has an EORI number
Authorisation requires a consultation process not exceeding 15 working days.
Ensuring importers have necessary information
Non-EU producers must provide information on CBAM goods to EU importers. If unavailable at import, default values can be used, though providing calculated embedded emissions is preferred.
Ensuring reliability of reported information
The Commission, in cooperation with Member States, will:
Monitor reported emissions and trade
Detect non-compliance and avoidance
Ensure verification during the definitive period
Embedded emissions must be verified by an accredited verifier, following verification rules set by the Commission. Verification reports are submitted with CBAM declarations.
Non-compliance results in penalties for the declarant.
Verifier accreditation
The Commission will define accreditation and verification rules in delegated and implementing acts under Articles 8 and 18 CBAM Regulation.
Free allocation and third-country carbon price
Rules for including free allocation in CBAM obligations will be developed by the Commission (Article 31(2) CBAM Regulation).
Authorised CBAM declarants may reduce certificates based on carbon price effectively paid in a third country.
Only effectively paid carbon costs are considered.
The Commission will provide detailed rules on calculation before the end of the 2025 transitional period (Article 9(4) CBAM Regulation).
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